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  Engineering Case Study, Speciality Chemicals  
  This business sold a wide range of products and grades of both liquid and solid speciality chemicals. Production was complex, some products going through most, and some just a few, of the possible process steps. These could involve one or more reactors, blending, treating, filtration, neutralisation and flaking.

The company had carried out some benchmarking of its engineering costs against competitors, and found it compared quite well. Maintenance cost was well in excess of £1 million per annum. Cameron was challenged to help the company make a substantial reduction.

Many factors interacted to generate cost within the engineering function – factors included batches, tonnes, cleaning, corrosion, process complexity, grade changes, breakdowns, government legislation and others.

Engineering defined its role as being to meet their service requirements while ensuring safe operation and maximum plant availability at lowest cost. They did not challenge the cost impact of decisions taken by the sales or marketing team: these were seen as being driven by the customer and not open to question.

We observed that while Engineering worked hard to limit cost increases year by year, they felt largely powerless about the overall level of costs. These were seen as being determined largely by factors outside Engineering – e.g. government legislation, the age of the plant, past investment decisions, top management’s capital expenditure policy, asbestos stripping, marketing decisions about the product mix, orders received from customers. If things went wrong – stoppages in particular – engineering was blamed. They were seldom praised.

We worked with Engineering first to understand better the shape of their maintenance costs, then to understand the reasons for this shape. Many new insights emerged, e.g. new understanding on patterns of breakdowns. Working in partnership with the company we then constructed new planning and control tools, and cross-functional teams, which enabled Engineering to become proactive about their cost levels, determining these jointly with other functions in the business.
Costs were reduced by 40% - a saving of over half a million pounds per annum.

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